- PetroNeft, the owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, has entered into a binding agreement in respect of a 50% interest in Licence 61 with Oil India Limited.

OIL will acquire a 50% interest in Licence 61 by making a total investment of up to US$ 85m consisting of:

· US$35m upfront cash payment which will enable PetroNeft to repay in full its existing debts (the Macquarie debt facility and the Arawak loan) and have cash for working capital purposes;

· US$45m of exploration and development expenditure on Licence 61

· US$5m performance bonus, contingent upon average production from the Sibkrayevskoye Field reaching 7,500 barrels of oil per day within the next 5 years.

The transaction is subject to shareholder vote and regulatory approval

At 4:25pm: [LON:PTR] Petroneft Resources PLC share price was +0.74p at 6.35p

Story provided by